ADVANCED ACCOUNTING (MCQS)

T.Y B.COM

SEMESTER - 5

MID SEMESTER EXAMINATION

ADVANCED ACCOUNTING

MCQS = OCTOBER - 2013

(1) As per AS-14 purchase consideration includes payments made to _______ of Transferor Company.

(a) Only Equity Shareholders

(b) Only Preference share holders

(c) Both Equity and Preference Share holders

(d) Equity & Preference shareholders and Debenture holders.

(2) The profits earned by a subsidiary company before acquisition by holding company is known as:

(a) Revenue Profits

(b) Post acquisition Profits

(c) Capital Profits

(d) Super Profits

(3) When there is goodwill arising on amalgamation in the financial statements of Transferee Company, Such goodwill should be amortized to income. The amortization period should not exceed:

(a) 7 years

(b) 10 years

(c) 6 years

(d) 5 years

(4) If the holding company receives dividend out of pre-acquisition profits of the subsidiary company it will be _______

(a) Credited to investment account

(b) Debited to investment account

(c) Credited to consolidated profit and loss a/c

d) Debited to consolidated profit and loss a/c

(5) Which of the following statements is/ are true?

Holding company can acquire controlling interest over the subsidiary company by -

(a) Holding more than 50% of shares in subsidiary company having voting rights

(b) Controlling the composition of the board of directors

(c) Controlling a holding company which controls a subsidiary company

(d) All of above

(6) Minority interest consist of :

(a) Proportional capital profits

(b) Face value of the shares held by outsiders

(c) Proportional revenue Profits

(d) All of the above (a) (b) and (c)

(7) A company has issued capital of 10,000 equity shares of Rs.10 each fully paid. It decides to convert its capital into 20,000 equity shares of Rs.5 each. It is a case of:

(a) Sub-division of share capital

(b) Consolidation of share capital

(c) Decrease in unissued share capital

(d) None of the above

(8) When amalgamation is in the nature of merger, the accounting method to be followed is:

(a) Purchase Method

(b) Consolidated Method

(c) Equity Method

(d) Pooling of interest method

(9) Amalgamation Adjustment Account is opened in the books of Transferee Company to incorporate:

(a) The assets of the transferor company

(b) The liabilities of the transferor company

(c) The statutory reserves of the transferor company

(d) The non-statutory reserves of the transferor company

(10) Under the "purchase method of accounting" the transferee companies incorporate in its-books :

(a) The assets and liabilities of the transferor company

(b) The assets, liabilities and statutory reserves of the transferor company

(c) The assets, liabilities and non-statutory reserves of the transferor company

(d) The assets, liabilities and reserves of the transferor company

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